The labor market showed signs of life in May following
extreme duress in April. Nonfarm payroll employment improved 2.509 million last
month after falling 20.687 million, revised from -20.500 million. The decline in
March employment was increased to 1.373 million from 870,000 reported last
month. An 8.165 million fall in May had been expected in the Action Economics
Forecast Survey. Improvement was widespread amongst industries.

The unemployment rate fell to 13.3% and backed away from its
postwar record of 14.7% in April. A rise to 19.8% had been expected. Employment
in the household survey increased 3.839 million after falling 22.369 million
while the labor force rose 1.746 million after declining 6.432 million. The
overall jobless rate, including those who were marginally attached or working
part-time for economic reasons, eased to 21.2% from 22.8%. Nevertheless, the
unemployment rate remained close to a monthly high not seen since late-1940,
according to the National Bureau of Economic Research.

The employment & earnings data are collected from surveys
taken each month during the week containing the 12th of the month.

From the payroll employment survey, the 2.509 million
in jobs reflected a 225,000 increase in factory sector employment which was the
first gain in three months. Construction sector employment gained 464,000 and
made up half of the prior month's decline. Employment in the mining &
logging sector fell 20,000 (-14.6% y/y) after weakening 54,000.

The number of private service sector jobs rose 2.425 million,
making up roughly one-tenth of the April decline. Modest increases following
extreme declines were the rule amongst industries. Leisure & hospitality
employment rose 1.239 million (-40.5% y/y) after declining 7.539 million. The
education & health services job market improved 424,000 (-7.6% y/y) after a
2.590 million decline. Retail trade employment rose 367,800 (-12.2% y/y)
following a 2.286 million shortfall and professional & business service
sector jobs improved 127,000 (-8.7% y/y) after falling 2.189 million. Financial
industry jobs increased 33,000 (-1.5% y/y) after declining 264,000. These
gains were offset by weakness elsewhere in the private service sector.
Continuing to drop was the number of information services jobs by 38,000 (-9.6%
y/y), the third consecutive monthly fall.

In the government sector, there also was weakness in hiring.
A 585,000 decline (-6.0% y/y) in the number of jobs was one of three straight
monthly declines. The falloff was led by an extreme 487,000 drop (-7.8% y/y) in
local government hiring which followed an even larger weakening in April. State
government jobs declined 84,000 (-5.1% y/y) after dropping 167,000 and federal
government hiring was off 14,000 (+1.6% y/y), the first month of decline this year.

Growth in average hourly earnings suffered from the hiring weakness with a
1.0% fall (+6.7% y/y) following a 4.7% rise. A 1.1% gain had been expected.
The fall was led by a 3.1% decline (+5.3% y/y) in
leisure & hospitality earnings which followed a 6.5% jump. Retail trade pay
declined 1.0% (+6.8% y/y) following a 3.9% jump. Professional & business
service sector earnings weakened 0.9% (+5.8% y/y) after rising 3.9%. To the
upside, education & health care earnings rose 0.5% (3.6% y/y) after
strengthening 1.3%. In the goods producing sector, factory sector earnings
declined 1.1% (+5.0% y/y) after a 3.3% improvement and construction earnings
improved 0.3% (2.5% y/y) following two months of 0.1% increase.

The length of the private sector workweek surged to a record 34.7 hours after
falling sharply to 34.2 in April. Private service sector hours increased to a
record 33.8 led by financial services to 37.8 hours and professional &
business services to 36.4 hours. Factory sector hours rose to 38.9 after falling
sharply to 38.1 in April from 40.4 in March. Construction sector hours rose to
38.9 after a decline to 37.9 in the prior month. Mining & logging sector
hours were steady at 43.0 after falling from 45.2 in March.

From the household survey, the decline in the
unemployment rate to 13.3% occurred as the labor force participation rate
improved to 60.8% after collapsing to 60.2% which was the lowest since January
1973. The teenage participation rate rose to 33.9% after falling to 30.8% in
April, and for those aged 20-24, it nudged higher to 66.0% after plummeting to
64.5%. For workers aged 25-54, the rate recovered to 80.7%, after dropping
sharply to 79.9% from 82.6%. For men in that age bracket, the rate rose to 87.2%
after plunging to 86.4%. For women of that age, it inched up to 74.3%, up m/m to
73.6% which roughly equaled the annual cycle low of 73.7% during all of 2015.
For workers aged 55 & over, the participation rate fell to 38.5%, a 13-year
low. The employment/population ratio for all workers edged higher to 52.8% from
51.3%, but remained sharply lower than 61.2% in January.

The average duration of unemployment rose to 9.9 weeks in May
after April's drop to 6.1 weeks, which contrasted with an annual high of 39.4 in
2012. The percentage of unemployed workers on temporary layoff fell to 73.0%
from 78.3% in April. These figures were up from 12.6% at the start of the year.

The teenage unemployment rate eased to 29.9% from the record
31.9% in April, up from 14.3% in March. The rate for workers aged 20-24 also
slipped from the record 25.7% to 23.2%, substantially higher than 8.7% in March.
For workers aged 25-54, the rate slipped to 11.5% from the record 12.8%, more
than triple its reading in March. For those over 55, the jobless rate eased to
11.8% from the record 13.6%, up from 3.3% in March.

By educational attainment, unemployment of workers without a
high school diploma was 19.9% in May after spiking to 21.2% in April, following
6.8% in March. High school graduates without any college were 15.3% unemployed
last month, down from 17.3% in April but still up from 4.4% in March. Those with
some college but no degree were 13.3% without work in May, up from a near-record
low of 2.7% in December. College graduates were 7.4% unemployed, increased from
a 1.9% low in February.

The labor market data are contained in Haver's USECON
database. Detailed figures are in the EMPL and LABOR databases.
The expectations figures are in the AS1REPNA database.

Firms Expect Working from Home to Triple from the
Federal Reserve Bank of Atlanta is available
here.